The effect of Fe content in Ni–Fe–Al oxide nano-composites prepared by the solution-spray plasma technique on their catalytic activity for the high temperature water–gas shift reaction was investigated. The composites showed a hollow sphere structure, with highly dispersed Fe–Ni particles supported on the outer surface of the spheres. When the water–gas shift reaction was performed over an Ni–Al oxide composite catalyst without Fe, undesired CO methanation took place predominantly compared to the water–gas shift reaction, and significant amounts of hydrogen were consumed. When appropriate amounts of Fe were added to the Ni–Al oxide composite catalyst during the plasma process, methanation was suppressed remarkably, without serious loss of activity for the water–gas shift reaction. The catalyst was characterized by STEM, XRD and H2 chemisorption measurements.